چکیده انگلیسی

This article explains how entrepreneurship can help resolve the environmental problems of global socio-economic systems. Environmental economics concludes that environmental degradation results from the failure of markets, whereas the entrepreneurship literature argues that opportunities are inherent in market failure. A synthesis of these literatures suggests that environmentally relevant market failures represent opportunities for achieving profitability while simultaneously reducing environmentally degrading economic behaviors. It also implies conceptualizations of sustainable and environmental entrepreneurship which detail how entrepreneurs seize the opportunities that are inherent in environmentally relevant market failures. Finally, the article examines the ability of the proposed theoretical framework to transcend its environmental context and provide insight into expanding the domain of the study of entrepreneurship.

مقدمه انگلیسی

Traditional theory from environmental and welfare economics largely concludes that market failures within the economic system not only prevent entrepreneurial action from resolving environmental problems but actually motivate environmentally degrading entrepreneurial behaviors (Dorfman, 1993, Pigou, 1932, Tietenberg, 2000 and Bator, 1958). More specifically, this literature states that, because of the unique characteristics of many environmental resources, certain obstructions to their efficient allocation in the market system exist, and, as a result, entrepreneurial action will not protect and preserve valuable environmental resources (Dorfman, 1993). From a practical perspective, this argument has led to policy that focuses on regulatory intervention as the primary solution to environmentally relevant market failures and has created a general lack of knowledge about the means by which entrepreneurs can help solve environmental challenges (Pigou, 1932 and Dorfman, 1993). Unfortunately, the entrepreneurship literature has been of little help in addressing this issue. Despite the fact that the entrepreneurship literature directly addresses the market-equilibrating exploitation of market gaps, imperfections, and failures (Leibenstein, 1968, Kirzner, 1973, Kirzner, 1985, Shane and Venkataraman, 2000, Dean and McMullen, 2002 and Eckhardt and Shane, 2003), it has yet to address how entrepreneurs can overcome environmentally relevant market failures and how the exploitation of these opportunities might decrease environmental degradation.
The purpose of this article is to demonstrate how entrepreneurship can help resolve environmental problems through the exploitation of opportunities inherent in environmentally relevant market failures and thereby help move global economic systems toward sustainability. Synthesizing theory from environmental and welfare economics with that of the entrepreneurship literature, we propose that the growing desire of market actors for the cessation of environmentally degrading activities represents opportunity for entrepreneurial action and that exploitation of these opportunities by entrepreneurs can lead to the enhancement of ecological sustainability. Whereas the welfare and environmental economics literature brings an understanding of the nature of market failures and the obstructions that produce them, the entrepreneurship literature suggests why these obstructions represent opportunities and how entrepreneurs overcome them. Thus, we seek to delineate the concept of environmental entrepreneurship and the more general term, sustainable entrepreneurship, and demonstrate the means by which entrepreneurial actors can achieve economic returns by exploiting environmentally relevant market failures. To the extent that entrepreneurs find innovative means of overcoming the barriers to the efficient functioning of markets, they can surmount the market failures that are responsible for environmental problems and help to alleviate these important economic challenges.
Such a synthesis of the entrepreneurship and environmental economics literatures makes a number of important contributions to the field of entrepreneurship. First, it reveals the presence of entrepreneurial opportunities in environmentally relevant market failures and correlates those opportunities to the magnitude of environmental problems or, at least, the economic value lost due to environmental degradation. Second, it provides specific knowledge about the means by which entrepreneurs overcome environmentally relevant market failure problems and are thereby able to exploit the economic opportunities they represent. Third, understanding the role that environmentally relevant market failures play in creating opportunities brings us closer to a theory of sustainable entrepreneurship which addresses more broadly the role entrepreneurs can play in creating a more socially and environmentally sustainable economy. Fourth, it suggests a less deterministic and more proactive role of entrepreneurs in developing the economic institutions that are necessary to overcome market failures. In this regard, our theoretical analysis suggests both that entrepreneurial action helps to motivate the development of economic institutions necessary for markets to function and that restrictive government intervention may be inferior to symbiotic actions that establish property rights regimes or otherwise enable markets for environmental resources.
Perhaps most importantly, the application of the environmental economics literature to entrepreneurship broadens our perception of the domain of the entrepreneurship field. Because the Austrian perspective focuses exclusively on widespread ignorance as the market barrier which engenders opportunity, the Austrian view limits conceptions of entrepreneurship to those individuals and organizations that capture opportunities through superior alertness. Our market failure perspective expands the Austrian view by delineating additional market barriers which create alternative types of opportunities and imply additional entrepreneurial means of exploiting them. At the broadest level, our approach suggests that market failures and imperfections are the sea from which opportunities are drawn and that an understanding of the scope of such failures informs the literature about entrepreneurial opportunities and actions that go beyond those identified by the Austrian view. At a level specific to environmental issues, the market failure perspective on entrepreneurship suggests that environmental problems result, not from humans' natural tendency to abuse the environment, but from an inadequate conception of entrepreneurship — one which fails to recognize the effectiveness of the entrepreneurial process in developing markets for environmental resources and preserving their value for present and future generations.
We begin our analysis with a review of market theory, the concept of market failure, and the role that market failure plays in environmental degradation. We then review developments in the entrepreneurship literature which parallel some of these thoughts and integrate them with the theory of market failure to arrive at our environmentally relevant conception of sustainable entrepreneurship. Using five classes of market failure that appear consistently within the literature, we then discuss the transaction obstructions that create market failure and provide opportunities for entrepreneurial action. We highlight the entrepreneurial actions necessary to overcome these obstructions and conclude the paper with a consideration of the theory's implications.

نتیجه گیری انگلیسی

By synthesizing the literature from environmental and welfare economics with that of entrepreneurship, we have articulated a conception of sustainable entrepreneurship and outlined how entrepreneurial action can overcome barriers to the efficient functioning of markets to contribute to the more efficient use of environmental and natural resources and the development of a more ecologically sustainable economy. Environmental entrepreneurs alleviate environmentally relevant market failures through the discovery, evaluation, and exploitation of opportunities present in market failure.
This conceptualization is based on a number of arguments which may be usefully summarized as follows: (1) Market failures represent a source of entrepreneurial opportunities – that is, unmet market demand exists as a result of discrepancies between private and social costs; (2) Because of the natural characteristics of environmental resources they are particularly susceptible to market failure and degradation – as a result, they represent a substantial source of entrepreneurial opportunity; (3) Because the exploitation of these opportunities requires the elimination of barriers to the efficient functioning of markets, entrepreneurial action to exploit market failures serves to move markets toward states of superior efficiency; (4) The exploitation of environmentally relevant market failures reduces environmental impacts and moves markets closer to sustainability; (5) Finally, the categories of market failure discussed in the literature provide a foundation from which to gain a better understanding of the nature of these barriers and the manner in which entrepreneurial action may overcome them for economic gain (See Table 1 for a summary).
Our analysis of the various categories of market failure suggests that the barriers which must be overcome include the lack of sufficient property rights regimes, the existence of prohibitive transactions costs, the government support of monopolies or Pareto inefficient industries, and imperfect information. Environmental entrepreneurs who establish more effective property rights regimes for environmental resources stand to gain from the transformation of a public good into a private one or from the elimination of externalities. Those who reduce transaction costs inherent in existing or potential markets enable the capturing of gains to trade which exist because of external effects. Others may create opportunities for themselves by finding ways to eliminate statutory support of competitive industries or firms. Finally, environmental entrepreneurs may find ways to perfect information in a manner that provides, creates, or develops markets or allows the entrepreneur to identify new markets or superior means for serving them. In each of these cases, in which a barrier to the efficient functioning of a market is creating environmental degradation, the act of exploitation has the potential to reduce environmental damage and enhance ecological sustainability.
Our conception of environmental entrepreneurship bears a number of similarities to the Austrian perspective on entrepreneurship (Shane and Venkataraman, 2000 and Kirzner, 1973). Although subject to interpretation by individual actors, opportunities are assumed to exist objectively within existing social and economic systems. We also view markets as existing in perpetual states of disequilibrium with constant alterations from the exogenous shocks which Eckhardt and Shane (2003) and others discuss. Although exogenous shocks push markets even further from equilibrium, exploitation of opportunities by entrepreneurs tends to pull the system towards equilibrium. Finally, because we view entrepreneurship as a process of exploiting market opportunities, we include both the formation of new organizations and the actions of existing organizations in our conception.
At the broadest level, however, our investigation suggests that the Austrian perspective on the domain of the field may be limiting. Our market failure perspective revealed that the barriers to the efficient functioning of markets go well beyond that of imperfect producer information regarding the nature of supply and demand. Opportunities inherent in a wide variety of barriers to the efficient functioning of markets exist and imply a much broader scope for entrepreneurial action than that of the Austrian perspective. We outline a variety of categories of entrepreneur including the Coasian, institutional, market appropriating, political, and informational entrepreneurs. Although we do not argue that we have created a typology of entrepreneurs, per se, the possibility that the domain of the field may extend substantially beyond current perspectives is intriguing and demands further investigation. Based on our analysis, such explorations should be founded on the nature of barriers to the efficient functioning of markets because it is these barriers which allow opportunities to persist long enough to generate returns. For example, knowing that public goods result from non-excludability provides greater insight into the types of resources and strategies that are necessary to equip someone to overcome this obstruction and exploit the opportunity that it creates. Each type of entrepreneurship may imply substantive differences in processes, required skills and competencies, risks, and outcomes.
Therefore, our approach differs somewhat from the traditional Austrian approach by integrating ideas from institutional economics (North and Thomas, 1970) and, of course, environmental and welfare economics. First, we focus more on the ability of entrepreneurs to influence the social and economic system and, through that agency, overcome the barriers which create market failure. In this respect, we see social and economic systems as subject to modification by various economic agents, including profit-motivated entrepreneurs. Second, we view economic systems as largely evolutionary in the sense that the foundational institutions (including property rights) which drive economic behaviors are subject to change over time. Though not always the case, this evolution tends to align social goals and private incentives, or stated differently, social and private costs. Thus, at least partially as the result of entrepreneurial action, economic systems develop over time to resolve social and environmental ills. This implies an additional departure from the Austrian view. For the most part, the Austrian view sees disequilibrium as the result of new or relatively recent exogenous shocks which are not instantly discovered by alert entrepreneurs. Our more institutional perspective recognizes the importance of such external changes but also emphasizes the fact that the economic system is a continually changing set of institutions which, hopfully, evolves to ameliorate both recent and longstanding market imperfections.
This conception of environmental entrepreneurship and the role of entrepreneurial action in eliminating environmentally relevant market failures also suggest an alternative to many scholars' view that market failure provides a prima facie case for government regulation. Our position coincides with that of institutional economists who suggest that market systems and the institutions that define them evolve over time in a manner that can resolve social ills. Thus, we emphasize the role that entrepreneurs can play in overcoming the barriers to the efficient functioning of markets and the resolution of environmental issues. This approach, however, requires intelligent and non-self-serving cooperation on the part of governmental actors. Rather than suggesting that government has no role to play in helping to resolve environmental issues, our analysis points to the important role government plays in establishing appropriate institutions that reward environmentally sound, entrepreneurial behaviors and that dissuade environmentally degrading ones. Thus, appropriate public policy is that which establishes property rights regimes and other economic institutions for environmental and natural resources in a manner that ensures their proper management for future generations. It also involves eliminating subsidies for environmentally damaging behaviors and perhaps developing policies that support more sustainable ones. Accordingly, it seems that the least effective form of government policies are economically restrictive regulations, especially those which directly prescribe the use of specific technologies or limit emissions without the right to trade emission credits. Perhaps most importantly, the proposed conception of environmental entrepreneurship recognizes the role of profit-seeking entrepreneurs in motivating the development of property rights regimes in a manner that can reduce environmental degradation. Finally, the view that entrepreneurs play a role in motivating changes in public policy, and the classification of that role as an entrepreneurial act, is somewhat unique, but not inconsistent with existing conceptions of entrepreneurship. To the extent that exploitation of opportunity is considered part of the process of entrepreneurship (i.e., Shane and Venkataraman (2000), who define entrepreneurship as the process of opportunity discovery, evaluation, and exploitation), motivation of government action may be viewed as entrepreneurial.
It is not our intention to suggest that all entrepreneurial behavior results in enhanced environmental welfare. Quite to the contrary, entrepreneurial behavior in a system that inhibits environmental entrepreneurship as we conceptualize it will naturally tend toward environmental degradation and natural resource exploitation. Entrepreneurs who externalize costs because of unprotected public goods or, worse yet, governmentally created, environmentally degrading discrepancies between private and social costs, will continue to contribute to the degradation of our environment and ecological sustainability. Furthermore, proposing that entrepreneurs can help resolve market failures does not imply that all market failures may be resolved by entrepreneurial action or that all markets can work to the benefit of society and/or the environment. Instead, we wish to point out the possibility and manner in which entrepreneurial action is capable of alleviating market failures and environmental degradation.
Accordingly, we view our conception of sustainable entrepreneurship as a subset of the general concept of entrepreneurship, and environmental entrepreneurship as a subset of the broader concept of sustainable entrepreneurship. First, we recognize that many entrepreneurial actions can actually increase market failure and result in additional environmental degradation. While these actions may be classified as entrepreneurial, they do not fall within the domain of sustainable entrepreneurship. Examples of such market-degrading actions include efforts of entrepreneurs to monopolize industries or externalize costs by releasing pollution into waterways. Second, because not all market failures are relevant to environmental resources, a set of opportunities for the elimination of market failures exists which are classifiable as sustainable entrepreneurship but not environmentally relevant. In short, sustainable entrepreneurship represents a specific class of entrepreneurship which addresses, among other areas, the capturing of opportunities present in environmentally relevant market failures wherein the exploitation of the opportunity alleviates the market failure and reduces environmental degradation. However, the notion of sustainability also addresses issues such as inequality, poverty, and disease. Although we chose to demonstrate the efficacy of the framework as it applies to the reduction of environmentally relevant discrepancies between private and social costs, there is reason to believe that the proposed theoretical framework could be used to provide theoretical insight into other issues of sustainability.
In conclusion, we believe that we contribute to the understanding of the role of entrepreneurs in moving the economy to an environmentally sustainable future. Viewing economic systems as dynamically adapting to emerging environmental challenges, we see that entrepreneurs play a role in breaking down barriers to the efficient functioning of markets and eliminating the market failures which produce environmental degradation and sustainability. Guided by intelligent public policy which enables sustainable entrepreneurship, it seems that the innovative power of entrepreneurship could be captured to build a sustainable world. Given the substantial challenges facing the global environment, we agree with The Economist's observation that the environment presents a substantial opportunity for enterprise and invention, and suggest that it may indeed be time that we both realize the importance of entrepreneurship to sustainability, and enable entrepreneurs to achieve its vision.